While I can blame the busy end of the semester for my lack of blog posts recently, two projects have taken most of the time not consumed by grading and helping students.
1. The Italy trip. On May 16th I will leave with 42 students and three other faculty members for Italy for a travel course to Venice, Florence and Rome. I am the person who deals with most logistics and finances, and that’s been keeping me busy. I budgeted the trip when a Euro cost $1.30. I realized at that time that the dollar was artificially strong against the Euro so I did most of my planning around a scenario where the dollar dropped to $1.45.
That wasn’t an arbitrary figure. I looked at the past and found that it is very rare to go down more than 15 cents in four months. Alas, the dollar is now nearing $1.50 per Euro, and the trip threatens to go over budget. This means that we won’t be able to purchase day trip tickets for students (if they choose a day trip they have to pay themselves) or admission into museums. All of that was budgeted into the trip. One reason this bites is that the air fare went up $100 over the original price quoted due to oil price increases. At that point the dollar was still doing well so I decided not to pass that cost on to the students, betting the dollar wouldn’t decline much in the next two months (this happened in March). That turned out to be a mistake.
More on the Italy trip as it nears. I will try to blog from Italy, especially about food this time!
2. A new writing project. While I am still working on a research project, I have also started to write a book. The goal: make political economy interesting and accessible to average readers.
One frustrating thing about conversations about the budget, taxation or economics in general is that very few people know much about how the political economy operates. That causes people to easily fall for slogans and simplistic claims. People believe things like ‘more taxation means less freedom’ or claims that it would be good not to raise the debt ceiling. More fundamentally, people don’t understand what is happening to the US and how the world economy is changing — changing in ways that are likely to dislodge the US from its perch atop the world economy and continue to imperil the shrinking middle class.
A lot of people got used to the idea, popular before 2008, that the US was economically superior to Europe because we had a higher per capita GDP, less regulation and less taxation. Now as the European countries recover and appear prepared for the challenges ahead, the US looks more wobbly than ever. It turns out that the ‘conventional wisdom’ that we were better off was based on a bubble economy and simplistic thinking. Yet most people haven’t grasped the seriousness of the situation, or the fact that our economy remains unsustainable unless we change course.
At this point, we can easily turn this around. We are not yet in true crisis. The only way that this will engulf us is if we got caught in political stagnation, adopt wrong headed policies, or do something idiotic like refusing to raise the debt ceiling. Neither the left nor the right are providing a coherent strategy to readjust. The right focuses its ire on the budget deficit. The debt is a problem, but not a crisis at this point. Moreover, until the economy starts growing it would be dangerous to cut the budget too much — when the economy starts growing not only will cuts be easier, but expenditures will fall and revenue will rise naturally. The left focuses on protecting the status quo, but that overlooks the need to react to the changes in the nature of the world economy forced upon us by globalization.
My book will be a mix of fiction and serious political economy, designed to be entertaining enough to appeal to average readers, but informative enough to actually educate. I also hope to introduce my own solution. I’ve been writing this pretty consistently in my ‘down time’ from work, but that’s stolen time from my blog. I have no illusion that I’ll actually write a best seller, but I know I definitely won’t if I don’t write anything! For now, I’m having fun with it. If I don’t get it published, I’ll probably roll it out in blog entries (on days I don’t write a new blog I’d give another piece of that book). For now, though, I’m just getting started.
No details on that yet, but it mixes history, philosophy, economics and politics, and has a quasi-spiritual angle as well. And I do have a few blog posts in mind for the coming days!